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Question : Which of the following is a capital account transaction?

Option 1: Receiving foreign aid

Option 2: Making a foreign direct investment

Option 3: Exporting goods and services

Option 4: Borrowing from a foreign bank


Team Careers360 21st Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: Making a foreign direct investment


Solution : The correct answer is (b) Making a foreign direct investment

Making a foreign direct investment (FDI) is a capital account transaction. The capital account of the Balance of Payments (BoP) captures transactions related to the acquisition or disposal of non-financial assets, such as land, buildings, machinery, and equity interests in enterprises, between residents and non-residents.

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